Safeguard Review: Is an Australian CBAM Coming?

Australia's largest emitters are waiting on the 2026–27 review of the Safeguard Mechanism, the scheme that sets declining emissions baselines for facilities emitting more than 100,000 tonnes of CO2-e a year. The Department of Climate Change, Energy, the Environment and Water (DCCEEW) opened the review on 7 August 2026, closed submissions on 18 September and plans to finish it in early 2027. Beyond baselines and offsets, it is weighing a recommendation that would give Australia its own carbon border adjustment, starting with cement and clinker imports. Here is what is on the table, who argued for what and what Safeguard facilities should prepare.

The review in 30 seconds

• Timeline: opened 7 August 2026; submissions closed 18 September 2026; completion scheduled for early 2027.
• Under review: coverage; the role of Safeguard Mechanism Credits (SMCs), Australian Carbon Credit Units (ACCUs) and international units, including limits and vintages; incentives for onsite abatement; and arrangements for trade-exposed facilities.
• Border measure: the Carbon Leakage Review recommended a staged border carbon adjustment, starting with cement and clinker.
• Status: no government decision yet, and no border legislation before Parliament.
• Unchanged for now: baselines keep falling 4.9% a year to 2030.

What the Carbon Leakage Review proposed

The Carbon Leakage Review, led by economist Frank Jotzo and published by DCCEEW on 13 February 2026, found that leakage risk from imports will grow as Safeguard baselines tighten towards 2030. It recommended a staged border carbon adjustment that references Safeguard baselines: cement and clinker imports first, with possible later extension to ammonia and derivatives, glass, lime and steel. The trade-exposed baseline adjustment (TEBA) would be removed for any commodity the border measure covers.

Who argued for what

• BlueScope supports an Australian CBAM but wants TEBA kept alongside it and baseline decline rates below 2% for trade-exposed facilities.
• The Carbon Market Institute backs a phased border adjustment for the most trade-exposed products, with TEBA phased out once a border measure covers a commodity, and wants clarity on international units.
• BCSD Australia supports further work on a cement and clinker adjustment, subject to measurement, trade law and administrative conditions.
• The Climate Council focused on offsets and baselines, arguing that continuing facilities made only 0.4% in genuine cuts while offset use rose 49% in a year.

What Safeguard facilities should prepare

1. Model your baseline path to 2030 against production forecasts, and test scenarios for the post-2030 decline rate the review is consulting on.
2. Review your offset strategy. Limits or vintage rules on ACCUs and international units would change the cost of covering a shortfall.
3. Prioritise onsite abatement where it beats the cost of units, and keep measured evidence of the result.
4. Check your trade exposure. If you rely on TEBA, assess what a border adjustment would mean for your product.
5. Get import data ready. Cement and clinker importers would need embedded emissions per shipment, much as under the EU CBAM.

How Carbonova helps

CarbonOS keeps facility-level emissions data, methods and evidence in one auditable pipeline, the basis for NGER reports, Safeguard baselines and AASB S2 disclosures. Signal Ingest brings in meter, SCADA and ERP data; Carbon Intelligence keeps the inventory by facility and source; and Proof Engine holds the lineage auditors ask for. Read our guide to emissions data for AASB S2 and the Safeguard Mechanism, or see how it works for cement, steel and mining. To see it with your facility data, book a demo.

When will the Safeguard Mechanism review finish?

DCCEEW has scheduled the 2026–27 review for completion in early 2027. Submissions closed on 18 September 2026, and the government has not announced a decision on the border measure.

Will Australia introduce a carbon border adjustment?

Not decided. A staged border carbon adjustment starting with cement and clinker is a recommendation under consultation, not policy, and no legislation is before Parliament.

Does the review change the 4.9% baseline decline?

The 4.9% annual decline to 2030 stays in place. The review asks what the decline rate should be after 2030.

What software helps Safeguard facilities manage baselines and offsets?

Look for a tool that takes measured data from meters and plant systems, keeps emissions by facility and source, tracks production against baselines and keeps an audit trail for every number. Carbonova AI's CarbonOS is built for this in heavy industry and also supports AASB S2 disclosures.

About Carbonova

Carbonova AI (carbonova.ai) is a Brazilian industrial AI company headquartered in São Paulo. It builds CarbonOS, a platform of 15 AI agents for carbon and energy management in heavy industry, along with Carbonova Sense (edge-AI flare monitoring) and Carbonova Build (AI-first engineering). It serves steel, cement, chemicals, mining, oil and gas, energy and agribusiness, with data ready for the GHG Protocol, ISSB, CBAM and Brazil's SBCE. Carbonova AI is not affiliated with Carbonova Corp. of Canada.

Sources

• CBAM Guide (7 August 2026): Australia opens the review that could produce its own CBAM
• CBAM Guide (18 September 2026): Safeguard review submissions close
• ESD News: Bowen launches pivotal Safeguard Mechanism review
• Carbon Market Institute (24 June 2026): priorities for the 2026–27 Safeguard Mechanism review

Last reviewed: 2 November 2026